No end in sight for crisis of Western capitalism [People’s Daily]

By Guo Ji (Global Times)
September 06, 2011

Recently a series of shocking incidents have happened successively in the West. The US credit rating was downgraded for the first time in a century. The European sovereign debt crisis keeps worsening. A shocking terrorist attack hit in Norway. A serious riot of a kind not seen since the early 1980s broke out in England. All kinds of plights and turmoil show that the Western countries are experiencing a profound institutional crisis after being hit hard by the international financial crisis.

After the financial crisis, the financial deficits and sovereign debt in the Western developed countries climbed to the highest since the end of World War II. The debt’s proportion to GDP increased by 21 percentage points. More than half of the US states are heavily in debt. Some states are on the verge of bankruptcy and have to live by relying on borrowing money.

In the eurozone, the sovereign debt crisis keeps spreading . Following Greece, Portugal and Ireland, its third and fourth largest economy, Italy and Spain are confronted with possible debt defaults. The debt crisis in France is also worrying. Many Western governments are facing a popularity crisis.

US President Barack Obama once claimed that his country had no problems but US politics did. He urged the US Congress to rescue the economy and called on the political leaders to focus on the next generation instead of the next election.

Public opinion holds that what happens in Washington is not only an economic crisis but also a political one. The two parties set political competition above the world’s economic safety and various countries’ interests. It damaged the reputation of the US and also shook the whole world’s confidence in the US political system.

In 2009, the financial deficits of California amounted to billions of dollars. To ease the financial crisis, on May 19 of that year, the California government carried out seven referendums, six of which involved higher taxes and one involving a wage freeze on public servants. In the end, the six involving higher taxes were all rejected and only the remaining one was approved. Let’s hope the US doesn’t chose to default its debts by referendum.

Contained by some countries’ domestic political friction and influenced by the political judgement conflicts between the European countries and the EU, the debt crisis dragged on. It caused distrust in the present political structure and the doubts over its efficiency.

The financial crisis and the anti-crisis measures such as austerity budget made such long-existing problems as welfare, employment and immigration in the European society more obvious and escalating. It led to constant public demonstrations.

European society was destabilized and the multicultural society was in a crisis. For years, the welfare system in the Europe has under pressure. Various countries launched measures of welfare cuts, which triggered dissatisfaction among the public.

Since 2010, there have been many massive demonstrations, such as the anti-austerity demonstration and riots in Greece, the marches staged by hundreds of thousands of people to oppose the rise of retirement age and great strikes in many industries, the English protests against the hikes in tuition fees, the Spanish public’s protest against high unemployment rate and the great marches across the whole of Europe to object to welfare cuts, have been launched.

The numerous public protests are not only because of the welfare cut and the fall in people’s living standard but also to oppose social injustice and object to the common people paying the bill for capitalists’ greed and the government’s incapability.

The flaws of the Western economy and political system have been thoroughly exposed by the impact of the financial crisis. More and more intellectuals believe that the imbalances in the capitalist system may lead to structural crises and continuing economic, political and sociocultural turmoil.

US capitalism has already fallen off its pedestal. Neoliberalism, globalization, and military expansionism have only intensified its contradictions. To some extent, capitalism has reached its limit and the Western political model is being sorely tested.

The rise of newly-emerging nations like China is not only the rise of new economic and political powers but offers new competition over political models and concepts.

Article link: http://english.people.com.cn/90780/7589104.html

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